LOA 



LOA 



LOAN, in finance, money borrowed 

 by government for defraying the extra- 

 ordinary expenses of the state. 



The 'comparative advantage or disad- 

 vantage of the terms, on which the public 

 loans have been obtained at different pe- 

 riods, has frequently been misrepresented, 

 either from misconception or for party 

 purposes, though it is evidently a subject 

 on which the truth is very easily ascer- 

 tained. The economy or extravagance of 

 every transaction of this kind depends on 

 its correspondence or disagreement with 

 the price of the public funds, and the cur- 

 rent rate of interest at which money could 

 be obtained on good security at the time 

 the bargain was concluded ; and, conse- 

 quently, a loan, on which the highest in- 

 terest is paid, may have been obtained on 

 the best terms that could be made at the 

 time it was negotiated. The interest 

 paid, however, forms the real burden of 

 each loan to the country ; for, since the 

 mode of buying up stock at the market 

 price has been adopted in the redemp- 

 tion of the debt, the nominal capital that 

 is created has become but of little im- 

 portance, though certainly not to be 

 wholly disregarded. 



The first loans differed materially from 

 those of subsequent periods, in being 

 raised wholly on terminable annuities; 

 and in having a particular fund assigned 

 for each loan, by the supposed adequate- 

 ness or insufficiency of which the interest 

 required by the lenders was frequently 

 influenced, as well as by other causes, 

 which have since ceased to exist. 



During the reign of Queen Anne, loans 

 were chiefly raised on annuities for 99 

 years, till 1711 ; when, by the establish- 

 ment of the South Sea Company, a variety 

 of debts were consolidated and made a 

 permanent capital, bearing 6 per cent, 

 interest. About this period lotteries were 

 also frequently adopted for raising money 

 for the public service, under which form 

 a considerable premium was given, in ad- 

 dition to a high rate of interest. This 

 mode of raising money was followed in 

 1712, 1713, and 1714. In the latter year, 

 though the interest paid was equal to 

 only 5i. 7s. 2J. per cent, on the sum bor- 

 rowed, the premium allowed was up- 

 wards of 34/ per cent. ; but, as peace was 

 restored, and the legal rate of interest 

 had been reduced to 5 per cent, it seems 

 that a larger premium was allowed, for 

 the sake of appearing to borrow at a mo- 

 derate rate of interest. 



In the reign of George I. the interest on 

 a considerable part of the public debts 



was reduced to 5 per cent, and the few- 

 loans that were raised were, comparative- 

 ly, of small amount; that of the year 1720, 

 was obtained at little more than 4 per 

 cent, interest. 



About 1730 the current rate of interest 

 was 3 per cent. and, in 1736, govern- 

 ment was enabled to borrow at 3 per cent, 

 per annum. The extraordinary sums ne- 

 cessary for defraying the expenses of the 

 war, which began in 1739, were at first 

 obtained from the sinking fund and the 

 salt-duties ; a payment from the Bank, in 

 1742, rendered only a small loan neces- 

 sary in that year, which was obtained at 

 little more than 3 per cent, interest, ^i 

 the succeeding years the following sum's 

 were raised by loans. 



Sum borrowed. Interest. 



L. L. s. d. 



1743 1,800,000 384 



1744 , 1,800,000 3 6 10 



1745 2,000,000 407 



1746 2,500,000 551 



1747 4,000,000 480 



1748 6,300,000 4 8 Q 



Loans of the seveti years' war. 



1756 2,000,000 3 12 



1757 3,000,000 3 14 S 



1758 5,000,000 365 



1759 6,600,000 3 10 9 



1760 8,000,000 3 13 7 



1761 12,000,000 4 1 11 



1762 12,000,000 4 10 9 



1763 3,000,000 442 



Loans of the American war. 



1776 2,000,000 398 



1777 5,000,000 452 



1778 6,000,000 4 18 7 



1779 7,000,000 5 18 10 



1780 12,000,000 5 16 & 



1781 12,000,000 5 11 1 



1782 13,500,000 5 18 1 



1783 .12,000,000 4 13 9 



1784 ......... 6,000,000 5 6 11 



Loans of the war with the 

 public. 



1793 4,500,000 



1794 11,000,000 



1795 18.000,000 



1796 18,000,000 



1796 7,500,000 



1797 18,000,000 , 



1797 14,500,000 



1798 17,000,000 



1799 3,000,000 



1799 -.15,500,000 



1800 ....20,500,000 



1801 28,000,000 



French Re- 



